Florida began the trial in its opioid lawsuit against the Walgreens pharmacy chain yesterday, with outside attorneys representing the state in what could be an expensive, weeks-long courtroom ordeal.
An unanswered question is how the state’s private lawyers will be paid if they win. Florida has a strict $50 million cap on contingency fees for outside counsel hired by the attorney general, and previously announced settlements in the state’s opioid litigation appear to include more than $70 million in legal fees. That means regardless of how the state’s outside attorneys fare in court against Walgreens, they may have hit the limit of what they can earn.
Attorney General Ashley Moody declined to comment on the apparent conflict between state law and the opioid settlements her office has negotiated so far. Her spokesperson Kylie Mason said only that “the court will determine and award the reasonable amount of fees.”
That response puzzles Bill McCollum, one of Moody’s predecessors, who as Florida AG pushed for passage of the transparency in private attorney contracting, or TPAC, statute limiting contingency fees for outside lawyers.
"The fee cap applies regardless of what the court is doing,” said McCollum, now a partner with the Dentons law firm. “The intent of the law, and it's pretty clear on its face, is to limit the contingency fee portion of litigation expense.”
Florida went to trial against Walgreens after reaching $870 million in settlements with CVS and three other defendants, including $42 million in state litigation expenses and another $42 million in fees for lawyers representing cities, counties and other municipal plaintiffs. Combined with $36 million in fees that drug distributors McKesson, AmerisourceBergen and Cardinal Health agreed to pay the state in January, the total available now exceeds $78 million.
The state’s lawyers are Kellogg, Hansen, Todd, Figel & Frederick of Washington and Florida lawyers Drake Martin Law Firm, Curry Law Group, Harrison Rivard Duncan & Buzzett and Newsom Melton. Some of those firms contributed thousands of dollars to AG Moody’s political campaigns.
Moody’s office declined to comment on whether outside counsel have additional agreements that provide for hourly billing or some other method of being paid not subject to the statutory limit on contingency fees. The state’s contract with the private lawyers says “in no event shall the aggregate contingency fee exceed $50 million.” The attorneys also must maintain detailed records of their time and expenses that the AG can request at any time.
Florida was an early adopter of TPAC laws, passed after private attorneys reaped a multibillion-dollar windfall from the national settlement of state tobacco lawsuits in 1998. Florida’s lawyers stood to make $2.8 billion off the state’s $11 billion settlement until a judge blocked the payment and ordered them to arbitrate their fees instead. After that, groups pushed for transparency laws and fee caps to reduce the risk of AGs trading lucrative contingency-fee contracts for political contributions.
Louisiana passed similar legislation after former AG Buddy Caldwell evaded a Louisiana Supreme Court decision declaring contingency fees to be an illegal end-run around the legislative appropriations process. Caldwell hired outside lawyers for hundreds of cases, claiming the lawyers were being paid by defendants instead of the state. From an economic as well as legal standpoint, however, dollars obtained from defendants belong to the plaintiff, regardless of how those payments are characterized.
There hasn’t been a similar level of scrutiny or litigation over Florida’s fee cap, said McCollum, the AG from 2007-2011 who was also a Congressman for 20 years. The AG’s office might claim some of the $70 million-plus in litigation expenses to reimburse its own legal expenses, he said. But there also might be litigation over whether the outside lawyers are entitled to more, he said.
“Not many people thought the fees in this litigation would be exceeding $50 million," he said. "There could be all kinds of arguments that might be made. These are trial lawyers after all."
His opinion, however, is that the statute caps total fees available to outside lawyers on a particular matter at $50 million.
“That's the way it's written and intended, and I wrote it,” he said.
Florida law requires the AG to file a statement explaining why she is hiring outside counsel and post the contract on the agency’s website. Any contingency-fee payments also must be posted on the website for at least a year.
As for Moody and her lawyers' case against Walgreens, they've lost bids to exclude previous statements made by her and former AG Pam Bondi blaming Mexico, China and Florida itself for the addiction crisis.